The SEC's complaint, filed in U.S. District Court in Santa Ana, alleges that between early 2008 to February 2009, Kensington Resources, Inc., through its principals, Porche and Crowder, and its salespeople, raised $11 million from approximately 200 investors nationwide selling unregistered shares of American Environmental Energy, Inc. ("AEEI") common stock. The SEC's complaint alleges that Porche, Crowder, and Kafarski falsely disclosed to investors that payments of sales commissions were limited to 10% of the funds raised, when, in reality, 25% of the funds raised were paid to salesmen and sales managers. The complaint further alleges that these defendants misrepresented how the funds raised would be used, telling investors that 80% of the funds raised would be used by AEEI to conduct its green energy business. In reality, most of the funds raised were kept by Porche and Crowder to fund their lavish lifestyles and only $315,000 of the $11 million raised went to AEEI.

The SEC's complaint alleges that all of the named defendants violated the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933. The complaint also alleges that Porche, Crowder, and Kafarski violated the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint further alleges that all of the named defendants violated the broker-dealer registration requirement of Section 15(a) of the Exchange Act. Crowder also violated his previous bar from association with a broker or dealer in violation of Section 15(b)(6)(B)(i) of the Exchange Act. The SEC seeks permanent injunctions, disgorgement with prejudgment interest, civil penalties, and penny stock bars against each of the defendants.

Crowder and Engelhardt are repeat securities law offenders. In 1998, the SEC charged Crowder and Engelhardt with, among other things, violations of the antifraud provisions of the federal securities laws in connection with another offering fraud. Crowder and Engelhardt were enjoined from future violations of those provisions. Crowder was permanently barred from associating with any broker or dealer, and Engelhardt was suspended for one year from associating with any broker or dealer.